Question
1. You plan to put $142 in an investment account every year for three years starting in one year. If the investment returns 5.1%, how
1. You plan to put $142 in an investment account every year for three years starting in one year. If the investment returns 5.1%, how much will you have in your account in three years? Round and answer to the nearest cent.
2. If you could reinvest the cash flow stream of $800, $1200, $1500, $1700, $2000, $2500, $3000, and $3500 at 7% interest, how much will you have from this investment in 8 years? (In other words, what is the future value of this stream of cash flows?) Note that the cash flows are not necessarily the same as the previous problem's cash flows. Round to the nearest cent.
3. If you were offered an investment that will pay you $10340 every year forever, and you require a 9.6% return on investments with the same levels of risk, how much are you willing to invest today? Answer and round to the nearest cent.
4. A loan's quirky terms require the first payment to be made at the moment the money is lent. Payments are $86 every month, the monthly interest rate is 0.4%, and the loan is paid off in equal payments over 7 years. How much money was borrowed? Answer and round to the nearest cent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started